The hypothesis for the proposed project is that inhibition of the classical complement pathway with Peptide Inhibitor of Complement C1 (PIC1) will be neuroprotective in a rat model of neonatal hypoxic-ischemic encephalopathy (HIE). HIE is an ischemia-reperfusion injury of the brain that occurs around the time of birth, with up to 60% mortality and 25% of survivors left with a significant disability. The complement system, the most potent inflammatory cascade in humans, and a critical mediator of inflammation, phagocytic cell recruitment and direct cell lysis, has been shown to play a major role in the pathogenesis of HIE in animal models and human studies. Therapeutic hypothermia, the only accepted treatment for neonatal HIE, slightly improves short-term survival and neurodevelopment in HIE, but does not significantly improve long-term outcomes. To date, none of the tested pharmacological adjuvants to therapeutic hypothermia have demonstrated clinical improvement. Deficiency of C1q, the initiator molecule of the classical complement pathway, has been shown to be neuroprotective in an animal model of neonatal HIE. Our current lead compound of PIC1 (PA-dPEG24), is the product of years of rational drug design yielding a 15 amino acid peptide conjugated with PEG. Our compound binds to C1q, efficiently blocking complement activation at the first step in the cascade. The SBIR Phase I demonstrated proof of concept that PIC1 given as a rescue drug after hypoxia and in combination with hypothermia can yield decreased brain damage. This Phase 2 proposal will follow our PIND plan that was favorably reviewed by the FDA. We will focus on three key objectives: 1) Drug Product and Drug Substance evaluation, 2) non-GLP pharmacokintics and toxicology, and 3) PIC1 dosing optimization in the animal model of HIE as a rescue drug in combination with hypothermia compared to hypothermia-alone controls, the current standard of care. Successful completion of these studies will be used to generate a robust IND application and provide necessary data for First in Human as well as subsequent proof of concept studies in asphyxiated human neonates. Third-party market analysis shows the potential for healthy sales volumes for PIC1 in HIE. Third-party regulatory analysis suggests the potential for a stream-lined regulatory approach by seeking Orphan Drug and Breakthrough designations.